690 F.

2d 318
111 L.R.R.M. (BNA) 2669, 95 Lab.Cas. P 13,804

HILTON INTERNATIONAL COMPANY d/b/a Caribe Hilton

Hotel, Petitioner,
v.
NATIONAL LABOR RELATIONS BOARD, Respondent.
NATIONAL LABOR RELATIONS BOARD, Petitioner,
v.
PUERTO RICO HOTEL ASSOCIATION; San Juan Hotel
Corporation
d/b/a El San Juan Hotel and El Conquistador Hotel, The
Puerto Rico Hotel Corporation d/b/a The Palace Hotel;
Condado Holiday Inn; and Hilton International Company d/b/a
La Concha Hotel-Condada Beach Hotel, Respondents.
Nos. 1197, 1457 and 1458, Dockets 82-4022, 82-4040 and 82-4042.

United States Court of Appeals,

Second Circuit.
Argued July 12, 1982.
Decided Sept. 29, 1982.

Agustin Collazo Mojica, Hato Rey, P. R. (William Lespier, Lespier,

Munoz Noya & Ramirez, Hato Rey, P. R., of counsel), for petitionerrespondent Hilton Intern. Co.
Godfrey P. Schmidt, New York City (Maria Milagros Soto, Hato Rey, P.
R., of counsel), for respondents Puerto Rico Hotel Corp. and Condado
Holiday Inn, respectively.
Michael J. Dougherty, N. L. R. B., Washington, D. C. (William A.
Lubbers, Gen. Counsel, John E. Higgins, Jr., Deputy Gen. Counsel,
Robert E. Allen, Acting Associate Gen. Counsel, Elliott Moore, Deputy
Associate Gen. Counsel, Andrew F. Tranovich, N. L. R. B., Washington,
D. C., of counsel), for petitioner-respondent N. L. R. B.
Before CARDAMONE and WINTER, Circuit Judges, and MALETZ,*

Judge, Court of International Trade.

CARDAMONE, Circuit Judge:

Most people listening to live music in a hotel are only concerned with whether
the music enhances their dining or dancing pleasure. They do not consider
whether the musicians are employees of the hotel or work for the leader of the
band. Were the question seriously entertained, common sense would suggest
that musicians working together as a group are employed by their leader. That
question is precisely the one presented on appeal and on the record in this case
the common sense conclusion finds full support.

On September 11, 1979, complaints were issued against the Puerto Rico Hotel
Association (the Association), which represents certain Puerto Rico hotels for
purposes of collective bargaining, and several of the Association's members.
The complaint was based upon charges filed by the Federacion de Musicos de
Puerto Rico, Local 468 (the Union). The individual hotels named in the
complaints included: the San Juan Hotel Corporation d/b/a El San Juan Hotel
and El Conquistador Hotel; the Puerto Rico Hotel Corporation d/b/a the Palace
Hotel; the Condado Holiday Inn; and the Hilton International Company d/b/a
the Caribe Hilton Hotel and the La Concha Hotel-Condado Beach Hotel.
Specifically, the complaints asserted that the Union represented musicians
employed by Association hotels for so-called "steady engagements" (typically
in excess of one week), and that the Association's refusal to bargain collectively
with the Union until the Union conceded that the musicians were independent
contractors rather than hotel employees, violated Sections 8(a)(1), (3) and (5)
of the National Labor Relations Act (the Act), 29 U.S.C. 158(a) (1), (3) and
(5) (1976). The complaints further alleged that the Association and its named
members violated Sections 8(a)(1) and (5) of the Act by using personal service
contracts that disclaimed the employee status of the musicians and by
suspending bargaining with the Union because the Union had filed unfair labor
practice charges. Additionally, the complaints charged that the El San Juan
Hotel, the El Conquistador Hotel and the Palace Hotel, acting as individual
entities, violated Sections 8(a)(1) and (5) of the Act by withdrawing the
Association's authority to bargain with the Union on their behalf.

After a hearing the Administrative Law Judge (ALJ) found that the band
leaders in charge of the steady engagement hotel musicians were hotel
supervisors, not independent contractors, and that the musicians themselves
were hotel employees. The ALJ further concluded that the Union was the
proper bargaining representative of the musicians and that, therefore, the

Association hotels' use of personal service contracts, the Association's

conditional refusal to bargain with the Union violated Sections 8(a)(1) and (5)
of the Act. The ALJ also held unlawful the Association hotels' use of personal
service contracts, the Association's suspension of bargaining because of the
Union's filing of charges, and the three hotels' withdrawal from the Association
in order to avoid collective bargaining. Subsequently, the National Labor
Relations Board (the Board) issued a decision and order that summarily adopted
the ALJ's decision and required the Association and certain of its members to
take appropriate remedial measures.
4

The Caribe Hilton Hotel has petitioned for review of the Board's decision and
order, arguing, in part, that the Board erred in classifying the musicians who
perform at the hotels as hotel employees and the band leaders as hotel
supervisors. The Board has filed a cross-application for enforcement of its order
against the Association and the named hotels. Because there is not substantial
evidence in the record read as a whole to support the Board's characterization of
the steady engagement musicians as hotel employees and of the band leaders as
supervisory employees, we grant the petition for review and deny the crosspetition for enforcement of the Board's order.

* Section 2(3) of the Act, 29 U.S.C. 152(3) (1976), specifically excludes

from the definition of "employee," and thus from statutory coverage under the
Act, any "individual having the status of an independent contractor." General
principles of agency law govern the distinction between "employee" and
"independent contractor" for purposes of the Act. See, e.g., NLRB v. United
Insurance Co., 390 U.S. 254, 256, 88 S.Ct. 988, 989, 19 L.Ed.2d 1083 (1968);
Local 777, Democratic Union Organizing Committee v. NLRB, 603 F.2d 862,
909 (D.C.Cir.1978); Lorenz Schneider Co. v. NLRB, 517 F.2d 445, 446 (2d
Cir. 1975). This Court in Herald Company v. NLRB, 444 F.2d 430, 432-35 (2d
Cir.), cert. denied, 404 U.S. 990, 92 S.Ct. 532, 30 L.Ed.2d 541 (1971), used the
common law "right to control" test for distinguishing between employees and
independent contractors. Under the common law test an employer-employee
relationship exists if the purported employer controls or has the right to control
both the result to be accomplished and the "manner and means" by which the
purported employee brings about that result. Lorenz Schneider, 517 F.2d at
451; see also Restatement (Second) of Agency 220(1) (1958). As Judge
Friendly noted, this test is difficult to apply since the result is necessarily a
function of the manner and means employed. Lorenz Schneider, 517 F.2d at
451. Nevertheless, "the more detailed the supervision and the stricter the
enforcement standards, the greater the likelihood of an employer-employee
relationship...." Id. Factors which may be considered in determining employee
status include: whether the purported employee is engaged in a distinct

occupation or business; whether the work involved is usually done under an

employer's direction or by an unsupervised specialist; the skill involved; who
supplies the instrumentalities and place of performance; the length of
employment; the method of payment (by the time or by the job); whether the
work is part of the employer's regular business and/or necessary to it; and the
intent of the parties creating the relationship. Restatement (Second) of Agency
220(2). No single factor is determinative, Lorenz Schneider, 517 F.2d at 449.
II
6

The ALJ relied on the following facts in finding that the hotels control the
members of the steady engagement bands. The hotels determine working hours
including overtime, and the locations within the hotels where the bands play.
Occasionally, the hotels require certain types of music and direct that the
music's volume be increased or decreased. The maitre d'hotel can order music
stopped to speed up food service. Additionally, the hotels determine the size of
the bands needed and sometimes require that size be increased to produce a
certain sound.

Although these facts indicate that the hotels control each band's final product
(music of the type requested by the hotels at the time and place desired), these
facts fail to demonstrate any significant hotel regulation over the means by
which bands produce the music. Instead, the record reveals that the band
leaders exercise all the significant control over the manner of their own and
their musicians' performances. The leaders hire, fire, instruct and discipline the
musicians in their bands without consulting with or following any guidelines set
by the hotels. In fact, Association hotel officials do not generally hire, discipline
or fire individual band members; an Association hotel contractually can only
terminate the engagement of an entire band. Moreover, the leaders themselves,
and not the hotels, select additional and replacement musicians, approve
musicians' sick leave and vacations, schedule and conduct band rehearsals, and
select the repertoire, instruments used, style, tempo, and other standards of
performance. The leaders occasionally arrange outside employment for their
bands such as television shows, club dates, single engagements and recording
sessions. Although some hotels require band members to dress uniformly
during their performances, the band leaders and musicians, not the hotels, select
and pay for their own uniforms.

A further indication that steady engagement musicians and band leaders are not
employees of Association hotels arises from the fact that the musicians and
leaders are not subject to the same personnel practices and disciplinary rules as
are admitted hotel employees. For example, steady engagement musicians and

band leaders do not have access to hotel grievance procedures; they do not file
standard hotel job applications and do not have hotel personnel records; they do
not receive hotel uniforms and are not eligible for employee paid vacations.
Instead, the various steady engagement bands contract with the hotels, often
through their agents, not for the services of their individual members but for the
services of the entire band. In addition, while some Association hotels have
issued general rules of conduct barring musicians and leaders from drinking on
stage, gambling in hotel casinos, and socializing with guests, the ALJ
acknowledged that band members are not given detailed rules regulating their
conduct, as are admitted hotel employees. Further, the mere fact that a hotel
imposes certain restrictions on the conduct of the musicians to protect the
goodwill of the hotel and the welfare of the its customers is not of controlling
significance. Cf. Lorenz Schneider, 517 F.2d at 451 (franchisor's imposition of
standards upon operations of franchisee to protect goodwill not sufficient
evidence of control to establish employer-employee relationship).
9

In short, the record in this case indicates that the Association hotels exercise
control over the type, time and location of music produced by the steady
engagement bands; nevertheless, it does not appear that they have the right to
exert any significant authority over the manner in which either the band leaders
or the musicians perform. Thus, the evidence establishes that the steadilyengaged hotel musicians are not hotel employees, but rather, employees of their
band leaders.

10

Given the musicians' status as employees of the band leaders, we must

determine whether the band leaders are independent contractors or hotel
supervisors. The Board argues that even if the Association does not exercise
over the musicians and leaders that quantum of direct control normally
demonstrative of an employer-employee relationship, the band leaders are hotel
supervisors who exercise control over the musicians in the capacity of
autonomous department heads, such as a chef or maitre d'hotel. We find this
argument unpersuasive. Leaders usually form their bands before contracting
with Association hotels. Most bands bear their leader's name and build up their
reputations under that name. Leaders sometimes arrange outside engagements
for their groups, evidencing an independent entreprenurial status not normally
associated with the staffs of hotel kitchens or dining rooms. Significantly,
leaders usually deal with Association hotels through booking agents and are not
subject to the same hotel personnel procedures as are chefs and maitre d's.

11

Although the record contains references to a few instances in which bands

stayed on at Association hotels with new leaders after their original leaders had
left, there are also references to whole groups remaining together and moving

to different engagements. In fact, one of the groups that had stayed on intact
when its original leader left later became a new group and then moved on intact
under the group's subsequent leader. Thus, the steadily-engaged musical groups
controlled by the band leaders have an independent identity that is not
characteristic of hotel departments.
12

Other Restatement factors commonly used in determining employee status

support the conclusion that the steadily-engaged leaders and musicians are not
hotel employees. All the parties acknowledged that the musicians and band
leaders who perform in Association hotels are highly skilled members of a
clearly distinct occupation. Moreover, the band members usually provide their
own instruments and their own sheet music.

13

Although the ALJ apparently placed great emphasis on the fact that Association
hotels provide their steady-engagement bands with rooms in which to perform,
this fact is not always significant. For instance, building construction firms
generally perform their services at locations provided by the parties with whom
they contract without jeopardizing their status as independent contractors.

14

The ALJ's decision also implies that the method used to pay Association hotel
musicians indicates an employer-employee relationship. Steady engagement
bands typically contract with Association hotels to perform for a lump-sum
amount, exclusive of overtime, based upon the number of band members and
hours worked per week. Association hotels, however, usually pay each
musician through an individual employee payroll check, instead of merely
distributing to the leader the entire lump-sum. The hotels also withhold payroll
taxes from the musicians' paychecks. We do not accord much weight to this
fact, however, since the employees of independent construction contractors
engaged by at least one Association hotel are paid in the same manner.

15

It is unclear how much consideration, if any, the ALJ attached to the fact that
the Association hotels hire musical groups for long term engagements.
Although some bands perform at Association hotels for periods in excess of a
year, duration of employment does not in and of itself suggest employee status.
Cf. Associated Musicians of Greater Newark, Local 16, 206 NLRB 581 (1973),
aff'd, 512 F.2d 991 (D.C.Cir.1975) (orchestra members who performed
exclusively at banquet hall lounge for over four years not banquet hall
employees). As developed at oral argument, the mere fact that Guy Lombardo
played in the main ballroom of the Roosevelt Hotel for countless years did not
make him and his Royal Canadians Roosevelt Hotel employees.

III

16

On review, the Board's findings are entitled to deference if supported by

substantial evidence in the record taken as a whole, Universal Camera Corp. v.
NLRB, 340 U.S. 474, 488, 71 S.Ct. 456, 464, 95 L.Ed. 456 (1951); NLRB v.
Donald E. Hernly, Inc., 613 F.2d 457, 462 (2d Cir. 1980). The Supreme Court
made clear in United Insurance that although the determination of employee
status requires the application of law to facts and does not involve any special
Board expertise, a reviewing court applying the substantial evidence test may
not "displace the Board's choice between two fairly conflicting views even
though the court would justifiably have made a different choice had the matter
been before it de novo." 390 U.S. at 260, 88 S.Ct. at 991 (quoting Universal
Camera Corp., 340 U.S. at 488, 71 S.Ct. at 464); see Lorenz Schneider, 517
F.2d at 452. Upon careful consideration, we find that although there is some
evidence to support the Board's determination, it does not constitute substantial
evidence when viewing the record as a whole.1 The evidence instead
establishes with sufficient certainty that the band leaders are independent
contractors who employ the musicians who perform in the bands.

17

Accordingly, the petition for review is granted and the cross-petition for
enforcement is denied.

Honorable Herbert N. Maletz, Judge, United States Court of International

Trade, sitting by designation

Although each case involving the determination of employee status necessarily

turns upon the particular facts involved, this Court cannot help but take note of
the Board's decision in Associated Musicians of Greater Newark, Local 16, 206
NLRB 581 (1973), aff'd, 512 F.2d 991 (D.C.Cir.1975). In Local 16, the Board
held that the members of a steadily-engaged lounge orchestra were not
employees of the banquet hall restaurant complex in which they performed
despite the presence of the following facts which the Board urges us to rely on
here: the orchestra performed exclusively at the banquet hall lounge for over
four years; the banquet hall's management told the orchestra what types of
music not to play; management required the orchestra members to maintain a
particular appearance; and the hall controlled the time of performance and
forbid certain behavior by orchestra members, such as smoking on stage